Finance Ministry Under Fire for Graft Reforms

The recent case of tax official Gayus Tambunan showed that bureaucratic reform at the Ministry of Finance had failed, with high remuneration packages at the tax office doing nothing to curb cases of graft, politicians and analysts said on Friday.

Andrinof Chaniago, a public policy expert from the University of Indonesia, said the government needed to effectively address chronic problems ingrained within the ministry before it proceed with its reform program.

“The ministry failed to identify the actual sickness and therefore they got themselves the wrong cure,” he said, referring to the ministry’s claim that higher wages was one way to curb corruption.

Andrinof pointed out that the ministry’s main problem was in tackling the mentality of its rogue officials. “Employees at the ministry are corrupt, lazy and opportunistic,” he said.

Gayus, a middle-ranking tax official who was found to have Rp 28 billion ($3.1 million) in his bank accounts, made headlines last month when he was controversially acquitted of embezzlement by a district court and then fled the country to Singapore. Bribes to police are now suspected in his acquittal, and he is once again facing corruption charges.

The level of compensation varies, depending on workers’ field and position. Officers at the Directorate General of Taxation, Directorate General of Customs and Excise and Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) receive the biggest pay packages.

Lawmaker Agun Gunandjar Sudarsa, from the Golkar Party, said that not only did the high salaries fail to fix the problems with graft in the ministry, but it also fueled jealousy from other government agencies.

For example, he said, the head of the tax office had lucrative bonuses that other directorate generals did not, such as additional work allowances.

Moreover, Agun said the variation in remuneration packages within the Finance Ministry itself was bound to result in resentment between departments and even between staff members.

Drajad Wibowo, deputy chairman of the National Mandate Party (PAN) and a former member of House Commission XI, which oversees financial and banking affairs, said the reforms at the Finance Ministry had clearly been unsuccessful.

“The ministry failed to create an internal control mechanism that works,” he said, adding that efforts to monitor graft had been inadequate.

“Let’s not forget that it was not the Directorate General of Taxation that uncovered or revealed the corruption by Gayus.”

Drajad said that President Susilo Bambang Yudhoyono should re-evaluate the ministry’s performance in light of the recent corruption cases and review its reform policies.

“The government has spent a lot of money on remuneration, but there is still a lot of corruption cases going on,” he said, adding that even with the high salaries, the ministry still failed to reach its revenue targets.

“The gap between the government’s targeted tax revenue and the actual revenue is still very wide.”

In addition, Drajad claimed that the ministry had also failed to remove the bureaucracy plaguing its operations. “It still takes a long time to get things done,” he said.

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